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Ocado's new warehouse has thousands of robots zooming around a grid system to pack groceries. The thousands of robots can process 65,000 orders every week. They communicate on a 4G network to avoid bumping into each other. Is this the future of retail?

Ready for unique insights into Canada’s e-commerce holiday landscape – and tips on how to make the most of this 2018 holiday season?

Farid Mheir's insight:

WHY IT MATTERS: holiday season starts with black friday / cyber monday. Companies need to prepare to get their logistics and delivery ready. Some useful insights in this shameless plug from Canada Post...!

Proposed facility part of push to boost online grocery fulfillment. Walmart representative said the concept marks a different grocery pickup approach and would represent its largest pickup-only site. The location also would be Walmart’s first stand-alone, drive-up grocery facility in Illinois. The building would have no customer access and house 41,700 square feet of inventory space. Signs would direct customers driving through the lot to one of three canopied pickup bays, where they would park in a designated space and have their groceries loaded into their vehicle. Customers would order their groceries as usual via the Walmart Grocery app or website and select a pickup time in one-hour windows. Pickup trips and parking spots would be coordinated to avoid congestion.

Farid Mheir's insight:

WHY IT MATTERS: when Walmart gets into something, you should watch out. Here it seems they are exploring options for grocery fulfillment and delivery - as everyone is trying to figure out what will customer prefer and where to make money. But the solution feels like back to the future: the concept looks like a sears pickup counter from the old days! The article also mentions some delivery options being tested by Walmart including autonomous cars and crowdsourcing.

WHY IT MATTERS: I tried this electric powered trailer at CES 2018 and it is truly amazing. Is this the missing piece in the delivery logistics nightmare of urban areas? Not sure but certainly fills a missing piece of the puzzle.

The growth of last-mile delivery and demand for next- and same-day service is pushing logistics beyond traditional hub and spoke models to regional options, crowdsourcing, digital, and smart automation.

Farid Mheir's insight:

WHY IT MATTERS: delivery models are plenty and need to be expanded to reduce the cost of eCommerce deliveries.

Will we be able to create sustainable prosperity, or are we on the way to a climate crash? Is the world interconnected or fragmented? Which new technologies shape our everyday lives? In a new study entitled “Delivering Tomorrow: Logistics in 2050," Deutsche Post DHL Group presents five sweeping, sometimes radical, prospects for the world in 2050 as well as the impact they would have on the logistics industry.

Farid Mheir's insight:

WHY IT MATTERS: very interesting future projection regarding logistics and parcel delivery in the future by a world leader in the field - DHL.

Blockchain disruptive nature is derived from its ability to transform almost any process, from basic documentation to settling complex contracts across geographies.

Farid Mheir's insight:

WHY IT MATTERS: we focus on the financial use cases of the blockchain. However there are many more - and potentially more important - use cases for blockchain outside payment and financial transactions. They must be considered careful by anymore preparing a digital strategy today.

WHY IT MATTERS: Amazon spends 14.2% of its net sales to fulfill orders and 12.2% to deliver them to consumers. Thus a quarter of the costs of products sold is allocated to logistical costs and this is the biggest hurdle to eCommerce wide adoption. Amazon and other pure plays have a number of key advantages over established brick-n-mortar retailers (no retail store costs, no store employees, etc.) but they have to battle with order preparation and delivery which traditional retailers delegate to their customers as they push their carts in the store aisle. In that context, recent announcement of Sobeys to leverage Ocado's automated warehouse technology or recent Amazon announcement to create a parcel delivery solution that competes with FedEx and UPS makes sense. Any retailer thinking of scaling its eCommerce operation should thus make sure that its business model is viable regarding fulfillment and shipping - all other elements of eCommerce are not an issue.

Traditional retailers like Albertsons, Walmart, and Target are clambering to acquire delivery-focused tech startups to arm themselves against Amazon as it moves into the grocery space.

Farid Mheir's insight:

WHY IT MATTERS: distribution is the final frontier, the last nut to crack in eCommerce today - as most other aspects, from technology to processes to business models, have already been solved. Distribution remains costly and often an area that retailers - pure plays as well as brick and mortar - struggle with.

As discussed in the past, grocery food delivery appears to be the holy grail of delivery: 1) put trucks on the road with fixed schedules to deliver groceries as the milkmen did in the past 2) manage to break even on these deliveries as this pays for fixed costs - all other deliveries have only a marginal cost and thus become essentially "free"

Lay out the substance. The key is to keep your Custom brochure design company basic and successful. An excess of data may make the pamphlet seem jumbled. Therefore, your message will be lost. Farthest point the quantity of hues used to in the vicinity of two and four and utilize each shading reliably. For instance, utilize one shading for the headings and subheadings, and another for general content.

MIT researchers have developed a system that enables small, safe, aerial drones to read RFID tags from tens of meters away while identifying the tags’ locations. The system could be used in large warehouses to prevent inventory mismatches and locate individual items.

Farid Mheir's insight:

WHY IT MATTERS: drones and autonomous vehicles have applications in business settings that may be more valuable and faster to deploy short term than consumer applications we have come to see in recent years - like self-driving cars or drone following humans in the wild. Here MIT has adapted drones to perform inventory control using RFID tags in warehouses. At the recent CES 2018 event, drones from company Eyesee are equipped with high definition cameras perform similar tasks of inventory control and management. These solutions have short-term benefits for enterprises that warrant deployment of what is still a very new technology. In the future, Artificial Intelligence image recognition software should enable even more advanced inventory control.

WHY IT MATTERS: we all say companies must innovate but often they struggle because of internal operational constraints - after all they have a business to run and cannot disrupt their operations to try things out. That is why such an experiment by CDiscount is so important: they have created both a *place* where startups can do their things and a *process* for them not worry if they break something. Can't wait to see the results of that - but I guess it can only be positive, how can it not be?

Amazon will launch a package-delivery service called Shipping with Amazon, or SWA, The Wall Street Journal reported. The service is designed to compete directly with UPS and FedEx. SWA is expected to roll out in Los Angeles over the next few weeks, then spread to other cities in the US during the year.

Farid Mheir's insight:

WHY IT MATTERS: this is not a surprise as delivery fees are close to 15% of Amazon costs. I wrote about this in the past numerous times and it looks like Amazon is moving in the direction of competing with large delivery providers. Again, Amazon only needs to break even on delivery costs, it does not need to make a profit. Moreover, going into grocery eCommerce can provide additional volume and predictable routes (think milkmen routes) to put trucks on the roads, pay for their fixed costs, and effectively make delivery "free" for all other product categories. When self-driving cars -or more likely autonomous vehicles - become a reality, Amazon will be there to reap the benefits. Another attack of established retail and distribution industry that Amazon is famous for.

The 90,000-square-metre warehouse is the starting point for 190,000 customer deliveries every week

Farid Mheir's insight:

WHY THIS IS IMPORTANT

This is one of the ways eCommerce will evolve in the near future: robotization. Orders are prepared automatically, without humans touching them. Even for grocery. Especially for grocery. Because it is a high volume, low margin operation, grocery mandates automated preparation. Of course, this level of investment can only be afforded at very high volume, which is the case in the UK where Ocado's warehouses like this can deliver 190,000 orders every week. No other country has this level of grocery eCommerce but when they do (think Amazon Fresh in the US), robotic warehouses like this will become mandatory to stay in business.

The last missing link will remain, of course, the last mile: delivery. There, self driving cars and drones may offer a solution.

The Internet of Things, artificial intelligence, droid delivery systems, mobile wallets and in-store gardens should be on every grocer’s radar in the year ahead.

Farid Mheir's insight:

WHY THIS IS IMPORTANT

WE always think of grocery as non technical and very hands-on, touchy-feely. This is becoming less and less so, a testament of the profound impact that digital technologies are having in our society at large.

Unleash the bots! Automation has emerged as a critical issue in the US following a 2016 election that focused largely on jobs and plans to save them. Though a significant amount of attention has been directed towards autonomous driving as a potential job killer, specifically for long-haul trucking, delivery robots appear poised to go mainstream much sooner.

Farid Mheir's insight:

WHY THIS IS IMPORTANT

We think of robots as fixed machines that assemble cars. However, with the advances in autonomous driving we may see an explosion of delivery robots. We have seen experiments with the use of drones to deliver products (Amazon and others) and now we are seeing self driving robots appear on the streets as it is much easier to get permits for those than it is for flying objects that can crash and hurt people. This is important because delivery remains the Achille's heel of eCommerce (slow, expensive): whoever cracks this problem and comes up with a low cost and economical solution will make a killing.

Amazon is building an app that connects truck drivers with shippers, getting itself into the $800 billion trucking industry.

Farid Mheir's insight:

WHY THIS IS IMPORTANT

A key piece of eCommerce and retail has to do with delivering packages from warehouse to customer homes or offices. Amazon spends 12% of its revenue for shipping and is expected to ship more volume than FedEx in 3 years. To reduce this cost and improve customer service by allowing more frequent and faster delivery, Amazon has been doing a number of things:

Combine all these innovations and you have a profound disruption in the delivery and logistics industry. Retailers should now consider Amazon no longer as an online marketplace and third-party logistics company (3PL) but also as a parcel delivery solution provider that can compete FedEx and UPS provide last-mile delivery solutions and eliminate the need for retailers to maintain or lease their own delivery vans and trucks.

A conference and expo for retailers looking to optimize their business through supply chain, logistics, fulfillment, warehousing and transportation.

Farid Mheir's insight:

To succeed in eCommerce you need to master one thing: delivering products to your customers rapidly at the lowest cost possible.

This is why events such as this one have become essential. I would even say that delivery is the single most important aspect of an eCommerce solution, as it is where your margins are made or lost. Ensure you have a comprehensive last mile model and you will be guaranteed not to loose money.

One of the biggest tests of agility for the consumer products and retail industries currently is last-mile delivery and associated services (e.g. returns). These services are now so pivotal to the customer experience that they are determining brand choices as never before. Achievements in getting products efficiently to the warehouse now need to be matched by equivalent improvements in getting goods to (and from) consumers.

To learn more, download the white paper which examines the latest innovation in last-mile services and explores how companies can harness the opportunities, and keep customers happy, without undermining their businesses.

Farid Mheir's insight:

A detailed white paper from capgemini on how to improve the last mile, from your warehouse to the customer door and back if required. Full of ideas, strategies and solutions to improve logistics, returns, supply chain, etc.

Mossberg asks if Bezos wants to build a delivery system. "No, but we're aiming to supplement it heavily," he says.

During peak holiday seasons, Amazon has to bring in its own trucks in many countries, he says.

"We'd always like better prices" from FedEx, Bezos says.

"We are driven to supplement their capacity," he says. "We're growing our business with UPS. We're growing our business with the US postal service. And we're still supplementing it."

Farid Mheir's insight:

Jeff Bezos said during Code conference that Amazon will not get into the delivery business to replace partners - but will supplement it heavily.

I wrote before that amazon will get into the grocery food delivery business because it is the only way they can reduce their delivery costs - costs they have to give to fedex, purolator, USPS and others. So basically they will go into grocery business to break even and get free local delivery in certain key market areas.

Recently, Walmart has begun pilot tests to deliver groceries using UBER (http://www.reuters.com/article/us-wal-mart-groceries-idUSKCN0YP0H6?il=0). This sounds like a great idea, focussing on each other's strength (walmart = products & logistics, uber = delivery) with no investment to access huge volume. This option may not be as efficient as the Amazon model however but be a great solution in periods of high volume.

To see what I wrote about this, see http://www.scoop.it/t/digital-transformation-of-businesses?q=amazon+fresh

WHY THIS IS IMPORTANT

Delivery remains the biggest cost for online retailers. Between 10% to 20% of retailer costs are sunk into delivery. This remains a huge hurdle for both retailers and consumers compared to physical stores. I expect online retailer to be more and more creative on the delivery front to reduce costs and deliver faster.

Established eCommerce retailers should look for opportunities to improve delivery and newbies to never underestimate delivery as it is the CORE to make or break their online retail business. Mark my words...

Amazon has rapidly grown from an online book store to a purveyor of nearly every sort of product made, as well as a technology behemoth offering cloud services and Kindles. Behind the web façade is a sprawling network of distribution centers where temp workers scramble like rats in a maze, pulling boxes off shelves, directed by handheld devices that not only show where the goods are stored but the most efficient path to walk. These devices also monitor each worker’s performance, coaxing them to move faster, move faster, move faster.

Farid Mheir's insight:

Interesting insight into the impacts of digital transformation of retail. And as we shy away from stores for more than the necessary showrroming, warehouse fulfillment centers will become more and more the norm. Amazon is leading the digital improvements but it looks like work in Amazon warehouses is very close of its pre-digital days, as far as human tasks are concerned.

I spent few summers in the early 1980s working in such a warehouse and the work was very similar, except for the amount of digital technology involved. Not a great place to work but a great incentive to stay in school and study. I'd rather be a microserf than an "amazon-serf"...

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